The summer of smartphones will give way to a winter of great contentment for the patient buyer.
Each year that passes the mobile phone industry resembles more and more the film industry with its cycle of summer blockbusters watched by relatively few, followed by big sales of the same massively promoted product again in the holiday period (in films through DVD sales). This summer we are seeing the release of blockbuster after blockbuster and we aren’t finished yet. And yet the carriers and manufacturers are clearly unable or unwilling to supply the demand that they have created, making getting a phone a pretty frustrating experience right now for the typical buyer.
The trick this summer then is not to be an impulsive buyer for three very good reasons:
You’re going to be paying for this phone for the next two years, so there’s no need to rush in.
It sounds obvious but with the cost of ownership of this summer iconic releases starting out at $2000 over the two year contract means that acting in haste could lead to a long, leisurely and expensive repentance. So as good as the EVO is you need to challenge yourself whether you’ll ever really need 4G or to use it as a WiFi hotspot. But if you do…don’t settle for anything less, even if you have to settle for a long wait to get your hands on one.
These iconic handsets are worth waiting for and will still be making your life easier in two years time. In addition to that, buying a later version of a hot handset usually means buying a better version of it. Glitches and bugs in the manufacturing and the software will get ironed out over time. In our industry the early bird can sometimes get a whole can of worms rather than the specific one he or she wants.
Supply will increase significantly in the fall.
The carrier’s business model and the practicalities of manufacturing new handsets means that there are self-imposed limits to what can possibly be available in the marketplace right now. It makes a lot of sense to use the summer to stimulate demand for handsets and new services but it makes little sense to fulfill it all at once. Carriers need to ensure that they aren’t disproportionately vulnerable to churn in any given month or quarter, so even when they have a red hot winner on their hands they’ll naturally look to create a long life for the product and sell it over a longer period. A good way of doing this is to limit supply in the near term.
Likewise, from a manufacturing perspective, factories can only churn out new handsets at a given rate, and it makes sense to plan manufacturing over longer periods to even out constraint on parts (such as screens this year) and of course cash. The largest spike in contracts coming due is in the four months either side of Christmas hence it makes sense to use the summer period to assess demand and the holiday period to fulfill it. Launch a hot handset in June, but find it’s a bit of a turkey? You still have some time to do something about it. Launching straight into the holiday period is much more risky. Carriers and manufacturers alike are using the summer to launch handsets but will really double down between November and February to sell them.
If you can’t get the handset you want now, my bet is you’ll have no trouble getting it for Christmas. Just let Santa know.
The hot releases aren’t finished yet.
Between now and the holiday season there are even more cool handsets to come. RiM has yet to enter the fray and there are the new Windows 7 offerings as well. Who knows maybe HP have something up their sleeve with Palm? Waiting for another month or two will give you the pick of everything that you want and lots of feedback from the early adopters on what is hot and what is not about them.
There might also be some useful drops in price between now and then too. The winners from the iconic handsets being launched this summer will all enjoy a year of solid sales after the initial excitement has passed. Over time they’ll get cheaper to make, and the R&D and launch costs will have been amortized, meaning cheaper prices for you, if you can make a virtue of patience over the summer.
Are you willing to wait? Sound off below!
